✏️ Sample Solved Problem (IRAC Method) — KSLU Contract 2 Notes
✏️ Sample Solved Problem (IRAC Method)
Problem: B buys a specific car from S, pays for it, but leaves it with S for a few days. S, still in possession, sells and delivers the same car to C, an innocent buyer who pays in good faith. Who is entitled to the car — B or C?
I — Issue
Whether a buyer (C) acquires good title where a seller continues in possession after a first sale and resells to him, against the first buyer (B) who already owns the car.
R — Rule
- General rule (S.27) — nemo dat quod non habet: S, having already sold to B, no longer owns the car and cannot ordinarily pass title.
- Exception — Seller in possession after sale (S.30(1)): where a seller, having sold goods, continues in possession of them and delivers them under a sale to a second buyer who takes in good faith and without notice of the earlier sale, that delivery passes a good title to the second buyer.
A — Analysis
The decoy is ownership: B paid and property passed to him under S.20, so intuitively the car is B’s. But the law makes a deliberate policy choice to protect an innocent purchaser misled by possession. The conditions of S.30(1) are all met — S sold to B yet remained in possession, and delivered to C, who bought in good faith without notice of B’s purchase. C therefore takes good title despite B’s prior ownership. B’s remedy is not against the car but against the wrongdoer S, for damages (conversion / breach).
C — Conclusion
C is entitled to the car. Under the seller-in-possession exception (S.30(1)) the innocent second buyer obtains good title; B, the first buyer, is left to sue S in damages for the loss.
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